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Turner v. Virginia Department of Medical Assistance Services

United States District Court, E.D. Virginia, Richmond Division

March 19, 2018

DR. MARK G. TURNER, DDS, PC, and DR. MARK G. TURNER, DDS in his Individual capacity, Plaintiffs,


          Henry E. Hudson United States District Judge

         This matter is before the Court on three Motions to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and a Motion to Transfer Venue in accordance with 28 U.S.C. § 1404.[1]The Complaint contains one count alleging a violation of the Sherman Act and several counts alleging violations of state law.

         All parties have filed memoranda supporting their respective positions. The Court will dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the Court, and oral argument would not aid in the decisional process. E.D. Va. Local Civ. R. 7(J).

         For the reasons stated herein, the Court will grant the Motions to Dismiss. Count One will be dismissed with prejudice. The remaining state law counts will be dismissed without prejudice. The Motion to Transfer Venue will be denied as moot.

         I. Background

         As required by Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court assumes Plaintiffs well-pleaded allegations to be true and views all facts in the light most favorable to him. T.G. Slater & Son v. Donald P. & Patricia A. Brennan LLC, 385 F.3d 836, 841 (4th Cir. 2004) (citing Mylan Labs, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)). Viewed through this lens, the facts are as follows.

         Plaintiff Dr. Mark G. Turner, DDS[2] ("Plaintiff) was a dentist in the Roanoke, Virginia area during the period relevant to the Complaint. (Compl. ¶ 1.) From 2008 to 2014, Plaintiff treated Medicaid patients in the Smiles for Children ("SFC") program pursuant to an agreement with Defendant Dentaquest, LLC.[3] (Id. ¶¶ 2-3.)

         Defendant DMAS is the Virginia agency tasked with overseeing the SFC program and contracted Defendant Dentaquest to administer and supervise the program. (Id. ¶ 6.) DMAS is managed by the Secretary of Human Resources and a Director of Medical Assistance Services, who is appointed by the Governor and subject to confirmation by the General Assembly. Va. Code Ann. § 32.1-323. Additionally, DMAS has an eleven-member board ("DMAS Board"), which is comprised of five members who are health care providers and six members who are not health care providers. Va. Code Ann. § 32.1-324(A). The DMAS Board formulates and submits a plan for the provision of medical assistance services to the U.S. Secretary of Health and Human Services in accordance with Title XIX of the Social Security Act. Va. Code Ann. § 32.1-325(A). The Director of Medical Assistance Services is empowered to administer this plan and to "enter into all contracts necessary or incidental to the performance of the Department's duties and execution of its powers as provided by law." Va. Code Ann. § 32.1-325(D)(1).

         The SFC program is split into two parts: one component of the program is dedicated to treating patients up to the age of twenty one and the other component focuses on treating patients that are over the age of twenty one. (Id. ¶ 4.) Plaintiff "worked exclusively with the Over 21 portion" of the SFC program. (Id.) During his involvement with the SFC program, Plaintiff operated what was likely "the largest safety net adult Medicaid practice in Virginia" and "was treating at least 75% of the eligible Medicaid adults receiving treatment in the Roanoke Valley." (Id. ¶ 10.) The patients Plaintiff treated under the SFC program formed the entirety of his practice. (Id. ¶ 3.)

         The Roanoke-based Mission of Mercy Clinic ("MOM") was a project of the Virginia Dental Association ("VDA") that provided "free, volunteer traveling dental" services to the same segment of the population as Plaintiff. (Id. ¶¶ 13-14.) Defendant Dickinson, the Executive Director of the VDA, and Defendant Black, a VDA board member, are Founders of MOM, and Defendant Black serves as its Dental Director. (Id. ¶¶ 13, 27.) Plaintiff claims that competition with the MOM was detrimental to his practice, but he also credits his dental practice as a "contributing factor [to] the Roanoke Mission of Mercy going out of business." (Id. ¶ 42.) The MOM's financial model proved unworkable, and, sometime after September 2012, the program was reorganized into a Mini-MOM concept, which was "fully endorsed" by the VDA. (Id. ¶¶ 14, 42, 44.)

         In January 2014, Defendant Dentaquest ended Plaintiffs eligibility under the SFC program by terminating Plaintiffs contract "without cause." (Id. ¶¶ 21, 45.) Starting in 2014, Commonwealth Dental Clinic ("CDC"), which is owned by Defendant Harvey, became the only "provider[] for Adult (Over 21) Medicaid dental services in Western Virginia." (Id.66.)

         Plaintiff alleges that the "defendant dentists exercised their market power to push the Plaintiff out of his dental market niche, and out of business" and that DMAS and Dentaquest "knew there was antitrust activity" and took action that led to "further cover up and concealment of Defendants' actions against [Plaintiff]." (Id. ¶¶ 18, 54-55.) Specifically, Plaintiff claims that, in downsizing from the financially inviable MOM, Defendants agreed to provide treatment to non-Medicaid-eligible patients at the Mini-MOMs and funnel all Medicaid-eligible patients to Defendant Harvey's CDC. (Id. ¶¶ 14, 18, 43.) Plaintiff further alleges that "Defendant Greg Harvey agreed to absorb the Over 21 Medicaid practice of Plaintiff on the condition that he would not have to compete directly with Plaintiff." (Id. ¶ 48.) As such, Plaintiff alleges that Defendants Dickinson, Black and Harvey "joined together ... to put [Plaintiff] out of business in the Medicaid [SFC] program." (M¶I8.)

         As mentioned above, Defendant Dentaquest terminated Plaintiffs contract, ending his eligibility under the SFC program. (Id. ¶¶ 21, 45.) Plaintiff does not contend that Defendant Dentaquest lacked the contractual right to terminate his contract.[4] Instead, Plaintiff alleges that Defendant Dentaquest "did not act independently, " that "DMAS sought the Plaintiffs termination based upon the advice of Defendants Terry Dickinson, David Black and/or Greg Harvey, " and that Defendant Dentaquest notified Plaintiffs patients of his termination before the deadline for his appeal had passed. (Id. ¶¶ 45, 46, 61.)

         Plaintiff alleges that Defendant Dickinson communicated the progress of Plaintiffs termination to Defendant Black; that Defendants Black and Harvey purchased a building to house CDC prior to Plaintiffs termination "with the knowledge and intent ... that one of their main competitors ([Plaintiff]) would be eliminated by Defendant Dentaquest;" and that the VDA, led by Defendant Dickinson, supported the CDC despite "not supporting] the Over 21 Benefit in the past." (Id. ¶¶ 24, 35, 47.)

         In January 2015, Plaintiff filed an ethics complaint ("2015 complaint") against Defendants Harvey and Black with the VDA Ethics Committee regarding ethics violations surrounding the naming and advertising of CDC. (Id. ¶ 27; Exhibit D, ECF No. 1-4.) Plaintiff states that the VDA "likely did not conduct a review of [Plaintiff]'s Ethics Complaint, as, if they did, David Black would have been found blatantly guilty." (Compl. ¶ 27.) Further, Plaintiff alleges that Defendant Parris-Wilkins, a member of the VDA and the VDA Ethics Committee, "presumably" ruled against this complaint. (Id. ¶ 31.)

         In April 2016, Plaintiff was the subject of an inquiry by the Virginia Board of Dentistry ("BOD") and was ultimately sanctioned for violations stemming from the closure ofhis dental practice in 2014. (Id. ¶ 31; Exhibit N, ECF No. 1-17.) Defendant Parris-Wilkins was on the BOD panel that ruled against Plaintiff. (Compl. ¶ 31.) Plaintiff contends that Defendant Parris-Wilkins' service on this panel was a clear conflict of interest, due to her "close relationship" with Defendant Dickinson and her role in ruling against the 2015 complaint. (Id. ¶ 33.) In sum, Plaintiff claims that "Defendant Parris-Wilkins was involved in the Defendants' attempts to cover up their actions against Plaintiff." (Id.)

         Plaintiff asserts a cause of action under Section One of the Sherman Act and alleges that the relevant service market is:

(1) adult (over 21) dental services recognized under the Medicaid approved Smiles For Children program; (2) tooth extractions and related services, as identified under Medicaid approved Over 21 Smiles For Children program; and (3) Medicaid approved services for the Over 21 members of the Smiles For Children program in Western Virginia, and within a two hour drive of Roanoke, Virginia.

(Id. ¶ 56.) Plaintiff claims that, as a result of Defendants' anticompetitive actions, dentists have been deterred from entering the market and there has been a significant reduction in the availability of dental services. (Id. ¶ 64.) Further, CDC will continue to exercise its "influence" to maintain a "monopoly" over the market. (Id.) Plaintiff also claims that he has been "directly harmed" by Defendants' anticompetitive conduct and continues to suffer "significant economic and financial loss." (Id. ¶ 67.)

         Plaintiff previously brought a nearly identical action against a nearly identical cast of defendants in the United States District Court for the Western District of Virginia. See Turner v. Va. Dep 't of Med. Assistance Servs., 230 F.Supp.3d. 498 (W.D. Va. 2017) (hereinafter "Western District Case"). After considering Plaintiffs arguments, the Honorable Judge Jackson L. Kiser granted the defendants motions to dismiss and dismissed the action without prejudice.

         II. Standard of Review

         Generally, a court considering a motion to dismiss is both informed and constrained by the four corners of a complaint. The court, however, may properly consider documents that are attached to the complaint, Fed.R.Civ.P. 10(c), and take judicial notice of matters of public record, Sec'y of State for Defence v. Trimble Navigation Ltd, 484 F.3d 700, 705 (4th Cir. 2007). The task at hand is to determine the sufficiency of the Complaint, "not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). In considering a motion to dismiss, plaintiffs well-pleaded allegations are taken as true and the complaint must be viewed in the light most favorable to the plaintiff. T.G. Slater & Son, Inc., 385 F.3d at 841.

         Nevertheless, "in the event of conflict between the bare allegations of the complaint and any exhibit attached ... the exhibit prevails." Fayetteville Inv'rs v. Commercial Builders, Inc.,936 F.2d 1462, 1465 (4th Cir. 1991). The so-called exhibit-prevails rule is only applicable when a plaintiff relies on an exhibit to form part of its claim, such that a court can presume plaintiff "has adopted as true ...

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